A detached worker is an employee sent by his or her employer in one country to work temporarily in the other country for the same employer or an affiliate of that employer.

Under the agreement, a detached worker remains subject only to the social security laws of the country from which the employer transferred the worker. However, the worker must meet all of the following conditions:

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  The employer/worker expects the period of employment in the host country to last 5 years or fewer. The 5-year period begins with the date the employment in the host country begins or August 1, 1989 (the effective date of the agreement), whichever is later;

  and

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  The employment relationship existed before the employer transferred the worker from the home country; and

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  If an American employer sends an employee to that employer's affiliate in Portugal, there must be an agreement in effect between the American employer and the Internal Revenue Service (IRS) under Section 3121(l) of the Internal Revenue Code with respect to the affiliate. The 3121(l) agreement provides, among other things, for Social Security coverage for U.S. citizens and residents that the affiliate employs. In such cases, the employer must still obtain a certificate of coverage to establish the exemption from Portugal social security taxes.

The United States and Portugal can agree to extend the 5-year period, subject to the following conditions:

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  The employer or self-employed person must request the extension before the end of the initial 5-year period;

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  The extension will not exceed one year; and

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  Both countries agree to the extension.

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  RS 01901.070 Employment Outside the United States for a Foreign Affiliate or Subsidiary of an American Employer